Brussels finalises a directive to ban cuts to renewables

The European Commission is preparing a wide-ranging package of energy measures that is expected to be presented on 30 November, including a new renewables directive, another directive on energy efficiency and the national energy market to try to recover impetus for decarbonising the economy.

In the draft renewables directive, the European Commission is including an article by means of which it will specifically ban cuts to green energy. In particular, the new regulation guarantees that the level of funding granted to renewables projects, as well as the conditions assigned to them, are not reviewed so that they have a negative impact on subsidised projects.

The cuts of recent years that have taken place in countries including Spain and Italy have brought about a sharp reduction in investment. While in 2010 Europe received half of the money that was allocated to renewables, that amount was reduced by one fifth in 2015 to US$48.8bn, according to EC data.

EC forecasts indicate that if measures are not adopted, the incorporation of renewable energy by 2030, rather than achieving the forecast 27%, will barely reach 24.3%, which will mean the imposition of barriers to increase the security of the supply and the participation of consumers in the system.

One billion in investments

The Commission’s accounts indicate that an investment of one billion Euros will be needed between 2015 and 2030 to achieve the set objectives and fulfil Europe’s ambition to become the largest renewable energy market.

According to the draft regulation, article 3 establishes the EU’s 2030 target and requires that national targets for 2020 cannot be reduced as from 2021. Moreover, it obliges non-compliant countries to pay into a fund so that renewables auctions can take place at EU level.

Article 4 establishes a series of EU instruments so that Member States can design support systems that facilitate a cost-effective, market-orientated approach, including open, transparent and non-discriminatory tenders; as well as technological-neutral offers compared to specific technologies.

Article 5 establishes a gradual and partial opening of funding schemes for cross-border participation in the electricity sector. Article 7 regulates the way in which the proportion of energy originating from renewable sources as from 2021 is calculated. The Member States may establish a lower limit and distinguish between different types of biofuels produced from food and animal feed crops, for example, establishing a lower limit for the contribution by biofuels produced from oleaginous crops, taking into account the indirect change in the use of the land. The suppliers of power and fuels for heating and cooling include one exception for suppliers with small annual sales of heating and cooling at national level. The obligation will be fulfilled by means of physical incorporation, direct and indirect mitigation measures, endorsed by negotiable certificates.

Article 24 opens up local DHC networks to producers of renewable sources and residual heat and cold as well as to third parties acting on their behalf. It also gives energy consumers the option to stop purchasing heating/cooling from a DHC network at building level if the consumers, or a party acting on their behalf, are able to achieve a significantly better energy performance. Article 25 establishes an obligation in the EU so that fuel suppliers provide a specific proportion (20% by 2030) of low emission and renewable fuels (including renewable electricity and advanced biofuels).

Lastly, the article includes a provision that anticipates the introduction of national databases to guarantee fuels traceability and mitigate the risk of fraud.

Capacity market

The European Commission is also launching a directive on the electricity market under which it will approve a capacity mechanism open to every technology and with payments established by market mechanisms, as well as criteria for international purchases and price setting mechanisms.

The new standard will also analyse collaboration mechanisms between distributors and transmission companies. Similarly, new regional operational centres are will be created to contribute to the approval of ten-year plans for the construction of electrical grids.